Patrick and Brooklyn are making decisions about their bank accounts. Patrick wants to deposit $300 as a principle amount, with an interest of 3% compounded quarterly. Brooklyn wants to deposit $300 as the principle amount, with an interest of 5% compounded monthly. What method shoud they use in order to earn more money after two year?

Question

Mathematics

Austin Montgomery

4 January, 12:24

Patrick and Brooklyn are making decisions about their bank accounts. Patrick wants to deposit $300 as a principle amount, with an interest of 3% compounded quarterly. Brooklyn wants to deposit $300 as the principle amount, with an interest of 5% compounded monthly. What method shoud they use in order to earn more money after two year?

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Bossy · Answer 1

After solving:

Brooklyn's future worth ($331.48), which was compounded monthly is greater than Patrick's ($ 318.48), which was compounded quarterly. Therefore to earn more money in two years, compounded monthly is better than compounded quarterly.